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New Belgium Brewing: Defining a’Business on Sustainability…
New Belgium Brewing: Defining a’Business on Sustainability
When Jeff Lebesch and Kim Jordan expanded from home beer brewing to commercial production in 1991, they envisioned two goals for their new company: they believed they could produce world-class beers and they believed they could do this while kindling social, environmental, and cultural change. In 2012, their company, New Belgium Brewing Company (NBB), has become the third largest craft brewery in the United States and the eighth largest producer in the overall industry. The brewery also stands as a corporate leader in environmental sustainability and provides an example of how a company can incorporate environmental concerns into everyday business decisions. However, as NBB continues to expand, the company faces a number of challenges in reaching its environmental goals, many of which it cannot directly control.
History of New Belgium Brewery
Jeff was inspired to found New Belgium Brewing (NBB) while on a 1989 bike ride through the Belgian countryside. During his trek, he perceived a lack of flavor in American beers compared to those he was drinking in Europe. When he returned home to Colorado, he set out on a quest to introduce American beer drinkers to the unique essence found in traditional Belgian brews, from the tart framboise, the light saison, and the truly one-of-a-kind trappist ales. Using his home brewing experience, Jeff was able to develop a distinctive recipe for traditional Belgian amber ale. The ale, dubbed Fat Tire in commemoration to the inspirational bike trip, became the brewery’s flagship beer. By 1991, Jeff and Kim formally organized the brewery as New Belgium Brewing Company and began selling the first bottles of Fat Tire around their hometown of Fort Collins, Colorado.
Kim, serving as the businessperson of the two, engaged in the marketing and distribution operations, selling the beer to friends, neighbors, and local bars/stores. A neighbor provided the watercolors that adorn the beers’ labels, a tradition that lives on today. The beers were brewed in the couple’s basement, using an 8.5-barrel system (one barrel is 31 gallons) allowing for total production in 1992 of 993 barrels. By 2012, NBB produced over 750,000 barrels and sold in 31 states. In 1991, the company only produced two types of beer, the signature Fat Tire Amber Ale and the darker Abbey Dubbel. Today, NBB regularly produces 21 different styles, 11 being produced year-round. The main brewery is still located in Fort Collins, Colorado, and a new second brewery is opening in Ashville, North Carolina.
Core Values
Unique in the founding story of New Belgium Brewing is a commitment to a set of values that were adopted from the beginning. Before initial production and during the planning stages of the business, Kim and Jeff developed a set of core values and beliefs by which they would guide their company. Listed below, it is clear from this set of values that profitability is secondary to a sense of social responsibility. This responsibility is centered on two core concepts: the production of quality beer and beer culture and a business that can produce this beer while paying attention to environmental and social concerns. All business decisions are made according to the core values and beliefs, and everything is done with the mission “to operate a profitable company which is socially, ethically, and environmentally responsible, and that produces high quality beer true to Belgian styles.” The values live on today, unchanged from their original conception, guiding the 300-plus person company into the new era of craft brewing.
Our Core Values and Beliefs
Remembering that we are incredibly lucky to create something fine that enhances people’s lives while surpassing our consumers’ expectations.
Producing world-class beers.
Promoting beer culture and the responsible enjoyment of beer.
Kindling social, environmental, and cultural change as a role model of a sustainable business.
Environmental stewardship: Honoring nature at every turn of the business.
Cultivating potential through learning, high-involvement culture, and the pursuit of opportunities.
Balancing the myriad needs of the company, our co-workers, and families.
Trusting each other and committing to authentic relationships and communications.
Continuous, innovative quality and efficiency improvements.
Having fun.
New Belgium’s Sustainability Efforts
In the spirit of the core values, NBB has attempted to implement sustainable efforts in all aspects of the brewing process. Some of NBB’s efforts include the following.
Electricity
In 1998, NBB conducted a study to analyze its carbon emissions. It was found that the single largest factor was emissions generated from its electricity consumptionemissions released by coal-fired power plants. In response, NBB owners (which included the founders and approximately 90 employees) unanimously voted to source their electricity from 100 percent renewable, carbon-free wind sources. At a premium of 57 percent on its electricity bill, NBB became the first completely wind powered brewery. NBB also introduced a combination of solar PV, co-generation, metering, and control initiatives in an attempt to become a net-zero purchaser of electricity. A further example of its efficiency and conservation efforts includes the development of a “natural draft cooling” system, which utilizes outside air for refrigeration when the temperature is below 40 degrees. By 2015, 12.6 percent of NBB electricity was produced on-site. Also in 2015, the company began using and Internal Energy Tax to charge themselves based on the amount of energy purchased. The money funds future renewable energy projects like more solar panels and lighting upgrades.
Water
The average brewery uses five gallons of water to produce one gallon of beer. NBB’s ratio is 4.2:1. The majority of its water use efficiencies come from its conservation efforts. The company has analyzed all of its water consumption activities and has attempted to reduce use at every stage of production. NBB also has invested in an on-site water treatment facility Wastewater is treated in its “bio-digester” plant before being released into Fort Collins wastewater streams. NBB tries to use this processed water where it can throughout the brewery. In addition, the process creates methane that is captured and used to co-generate power for the brewery.
Waste and Recycling
NBB has made a number of conscious efforts to reduce input materials. NBB is also a believer in recycling; 99.8 percent of its waste escapes the landfill. The majority of its waste consists of spent grain, which is sold as feedstock for cattle. The remainder of its recycled waste includes a combination of glass, cardboard, and general office and industrial waste.
Carbon Emissions (Six-Pack of Fat Tire Amber’Ale)
New Belgium partnered with The Climate Conservancy to assess the greenhouse gases emitted across the lifecycle of its signature Fat Tire Amber Ale. The assessment was born from a goal to reduce the carbon footprint per barrel by 50 percent. It was found that over half of the total emissions came from “downstream” activities: distribution and retail storage. The majority of the remaining contribution comes from production and transportation of the raw inputs (barley and hops), bottles, and cardboard. Only 8 percent is produced directly from brewing activities, with nearly half of this being the actual found in the beer itself. Surprisingly, over a quarter of the total carbon equivalent emissions come from refrigeration at retail locations, something that is completely out of the control of NBB. By understanding where the emissions are generated, New Belgium is better able to target specific initiatives to reduce its impact.
Making a Bigger Splash
While NBB is proud of its sustainability efforts, the company also recognizes that much remains to be done. Specifically, NBB wants to make a stronger impact on the upstream (materials sourcing) and downstream (recycling) factorsfactors controlled by suppliers and consumers. Beer products, by nature, involve a great deal of packaging, most of which is still ending up in landfills. NBB, as well as the entire craft brewing industry, realizes that it must do what it can to encourage more consumer recycling. One possibility is the enactment of a national “bottle bill,” which would require consumers to pay a refundable deposit on glass bottles. When the consumer returns the bottle for recycling, they receive their deposit back and thus have a material incentive to recycle. The brewing and packaging industries do not generally support these kinds of bills, and many within the two industries have actively attempted to stop their passage. Opponents see the deposit as a kind of tax or price increase on the product. NBB, however, has shown an inclination for support, saying that “perhaps it is time for the domestic and craft brewers to support Bottle Bills to reduce our industry footprint.” In the meantime, NBB continues to use as much recycled glass as it can.
An additional effort to impact consumer decisions to recycle is centered on packaging. In an initiative begun in 2008, NBB started selling a small percentage of Fat Tire Amber Ale in lightweight aluminum 12-ounce cans. Because cans weigh less than bottles, they are more efficient to transport around the country. Transporting a bottle emits 20 percent more greenhouse gases than transporting a can. Consumers are also much more likely to recycle cans than bottles. Studies have shown that over half of all drinking cans are recycled and new cans generally contain more recycled content that new bottles (40 percent for cans versus 10 to 30 percent for bottles).
However, switching from bottles to cans is easier said than done. There are two central issues. The first is perception. As the Brewers Association noted, “Canned beer is commonly associated with mass marketed light American lager beer, budget beer and perceived inferior quality.” Additionally, NBB has crafted its image around uniquely styled bottles, complete with the company’s embossed logo and watercolor labels. By switching to cans, NBB would have to be willing to sacrifice this unique characteristic of the company. The second issue is the total environmental impact of cans. Even though cans have recycling and transportation benefits, they still have a negative impact on the environment. For example, the mining of bauxite and smelting of aluminum cans are more damaging to the environment than the production of glass bottles. Thus, the environmental benefits of cans over bottles remain unclear.
Despite the negative perceptions and unique environmental issues, canned beer sales are increasing, and today many craft breweries offer canned beer. New Belgium Beer began selling canned beers in 2013 with some success; by 2015, they had a recycle content of 68 percent on canned beers, far outperforming their peers with their recycle content.
A Future of Sustainability
Perhaps the biggest sustainability accomplishment of Belgium Beer is its achievement of Certified B Corporation status in 2013 and rising B Corp scores in 2015 due to a jump from 42 percent to 100 percent employee ownership. With the opening of a second facility in Asheville, North Carolina, the company is poised to expand. In fact, New Belgium donated land to the City of Asheville to build a new greenway in a previously urban zone. However, it is their new policy of employee ownership that experts believe is NBB’s latest win in sustainability. In fact, the competition for jobs at the new Asheville plant was so fierce that one new hire moved to Asheville more than a year before it opened to improve his chances of landing a job with the company.
The only dark cloud on the horizon is a rumor that Belgium Beer may “sell out.” In 2015, rumors began that the company was engaging in discussions with potential buyers. While co-founder Kim Jordan denies any deal, it is possible that this craft beer company, which built its reputation on sustainability, will join the ranks of the mega- brewers.
Are you more likely to purchase a product from a company with a strong commitment to sustainability?
The benefits of cans over bottles are unclear. Has NBB done the right thing by focusing more on canned beer?
Should NBB continue to make a greater commitment to cans? What additional options can NBB explore in the future?
